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To franchise or not?

Saturday, February 24, 2018

A franchise is defined as the right or license granted by a company to an individual or group to market or produce its products or services in a specific territory.

The idea has surfaced from time to time in Business as Mission (BAM) strategizing that franchising has a potential advantage in starting and operating kingdom businesses abroad.  Sometimes it has been referred to as “BAM in a Box”.  A report by the BAM Think Tank Group which met in Thailand in 2013 produced a lengthy report which is worth reading in preparation for contemplated steps in the direction of franchising.

One section of the report is entitled BAM in a Box SWOT Analysis.  The following is a summary of the SWOT section, but the full report is worth the reading: 
Business as Mission Franchising:
Replicating Proven Businesses
BAM in a Box
November 2013

Strengths for BAM Franchising (internal)
  1. Franchising builds on strong networks of distributors, distribution chains, and suppliers so the franchisee does not have to re-invent these.
  2. There is a less need for high level business expertise and entrepreneurial skills as building blocks and franchisor ideas are available for the franchisee by using templates and available materials and research. A person with strong people skills and some level of business acumen has a good chance to succeed.
  3. It opens up possibilities for peer BAM mentoring toward replicating the BAM model with financial and kingdom motivation.
  4. There is less risk than with a startup business.  Franchisors give tools to run a business so entrepreneurship is less necessary.
  5. Investors are more inclined to invest in a proven franchise concept than in a startup company.
  6. Franchising enforces accountability and professionalism with systems for training, marketing, financial projections, accounting, HR, etc.
  7. The franchisor provides training, mentoring, initiatives, peer-to-peer networking, support from other franchisees.
  8. Franchise models can strengthen the BAM movement with “back end” systems allowing more time for concentration on integration of faith and work.
Weaknesses of BAM Franchising (internal)
  1. There are few proven BAM franchise models.
  2. There is a danger of thinking it is easier than it is.  It is more than “executing the template” and it requires full business commitment. It still requires significant financing.
  3. Entrepreneurial franchisees may find the “franchise system” too limiting since it requires business skills, not significant entrepreneurial skills.
  4. The franchisor may not have a full understanding of, commitment to, and tolerance for all of the BAM bottom lines, particularly the spiritual and social.  A clear understanding of how the missional component integrates with the business is important and what control the franchisee has.
  5. Franchisees from the mission community may have additional training and support needs and the franchisor may not want to make the additional invest in them.
  6. It is high risk and likely will not work if the franchisee does not see it as a true profit-making business taking creativity, hard work, financial acumen and leadership in selecting/managing employees.  It demands an aptitude and calling to business and robust Biblical theology of business; it is not just a means to an end.
  7. The franchisor has the right to close down a low-performing franchise; putting at risk the missional ends of the franchisee.
  8. There is a contract between the franchisor and franchisee that carries certain requirements so the franchisee cannot do as he/she wants.
  9. People underestimate the amount of energy it will take to develop an operations manual, training system for employees, franchise agreements, marketing standards, etc.
  10. The franchisee must have a stake in the company, and not rely on an agency or church.
Opportunities for BAM Franchising (external)
  1. Franchising builds a culture of abundance mentality and sharing networks.  The pie gets bigger with sharing.
  2. A franchise has a proven business model and provides a place to start, when customers have been clearly identified.
  3. With clear understanding between the franchisor and the franchisee, the business provides opportunities for kingdom living, making disciples and loving people.
  4. Because of the networking and mentoring which is built-in to franchising, there are opportunities for expansion of the quadruple bottom lines.
  5. Franchisors see places to start and business opportunities which others may not see.
Threats to BAM Franchising (external)
  1. A franchise in a community has many stakeholders and all must be considered when bringing an enterprise in from the outside.  For example, competitors may create adverse reactions to the franchise.
  2. A franchise owner must realize the business is not all his and it may be threatening to not own the brand, just get what is left over after fees and royalty costs, and have to meet contractual requirements.
  3. Franchisors are focused on the financial bottom line and protecting their brand.  But this needs to be balanced with a nurture of the spiritual bottom line which constantly drives for a kingdom culture.
  4. Franchisees many times are advised to have a local partner for ease of legal requirements but the local partner may not fully understand franchise processes and procedures, cultural differences, ethical standards and kingdom focus.
  5. If capital is borrowed, payment schedules and pressure can be threatening and require due diligence and continual monitoring of cash flow.
  6. Non-compete clauses may make it impossible to establish a similar business if the franchise does not work out.  Franchisors have the right of first refusal and the right to sell to someone else.
  7. The franchisor could pull the franchise quickly if necessary (from their point of view), and the franchisee may be without a business visa and unable to continue in the country.

Larry Sharp, Director of Training, IBEC Ventures

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Emotional intelligence and success in business

Sunday, February 18, 2018

There are many metaphors in life which provide models for business, both here in North America and in Kingdom businesses abroad.  The recent football season and Super Bowl win for the Philadelphia Eagles provides such a “how to” model for success.

My family lived in Philadelphia for 17 years but were not privileged to view a Super Bowl winning team.  We now live in Seattle and have gradually started to cheer for the Seahawks who have demonstrated a good measure of success in recent years.  But it was easy to turn our attention back to the Eagles, especially during this past season as head coach, Doug Pederson developed the team into a champion in a different sort of way.  He demonstrates what it means to have emotional intelligence.

Daniel Goldman popularized the term “emotional intelligence” with a book by the same name in 1995.  It became a bestseller.  Emotional intelligence (EI) is the capability to recognize one’s own emotions as well as those of others and use EI to maximize interpersonal relationships with skill and empathy.

What did that mean for the Philadelphia Eagles?  What does it mean for our businesses?

From the start, the players knew Pederson was different.  He was genuine, honest, forthright, visible and empathetic.  He listened to the players and remembered what it was like to be in their shoes.  He walked the talk and fostered positive relationships among the players so they could overcome adversity, serve their community and focus on a higher purpose.  He earned their trust.

All of this certainly was related to Pederson’s faith in the God of the universe and his belief that he needed to live a life pleasing to him.  This was also true for Wentz, Foles and Ertz, among others.  Being a believer does not necessarily mean one becomes a winner, but there certainly is a connection between faith and the emotional intelligence of the Eagles’ leadership.  Some might say it was “living like Jesus”.

Philadelphia consultant, Kristin Dudley sums it up this way after the amazing Eagles season.  Emotional intelligence includes the following and was modeled by Pederson and the Eagles.  These principles can contribute to success in any business.1
  1. Practice self-awareness in order to achieve emotional intelligence. 
  2. Exercise empathy – put yourself in your team member’s shoes, look through their lens. 
  3. Create a culture of transparency – stay visible and grow trusted by your team. 
  4. Invest time in the relationships you have with your team members and give freedom for relationships to grow between them. 
  5. Never allow adversity to get you and your team down – change the narrative to see challenges as opportunities. 
  6. Provide a purpose higher than self. Give your team the opportunity to align with something mission-driven, it will elevate them. 
“One man can make a difference, but a team can make a miracle.” Words of wisdom that Eagles head coach Doug Pederson delivered to kickoff what became his unforeseen – unbelievable – championship winning season.   

1   Lead with Emotional Intelligence: 6 Ways of Doug Pederson, Head Coach of the Philadelphia Eagles, Kristin Anne Dudley, published on LinkedIn on February 6, 2018.

Larry Sharp, Director of Training, IBEC Ventures

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What makes a top ranked business leader?

Saturday, February 10, 2018

According to Comparably’s annual Best Places to Work 2017 list, these are the top ranked CEOs in the U.S. (for large and mid/small companies) this year.1 While startup companies are certainly different in many respects from these sizable companies, much can be learned from these individual’s and the culture which they foster.

Marc Benioff, Salesforce CEO
According to the study, Salesforce (CRM) employees gave Benioff an average score of 90 out of 100. One employee added that, “Marc drives an amazing culture through the whole organization,” while another employee said, “they care just as much, if not more, about their employees’ well-being (from health, to pay, to benefits, to happiness, to equal rights...), their community and the earth than revenue.”

Brian Halligan, HubSpot CEO
Halligan scored a 94 out of 100, citing his “down to Earth” demeanor and transparency as key factors to his high-ranking. “They all do real work. They are biased toward action,” one employee said.

Brad Smith, Intuit CEO
Smith scored a 91 out of 100, citing his ability to be “open with their plans,” and solicit info from the rest of the team,” as driving factors.

Jeff Weiner, LinkedIn CEO
Weiner scored an 86 out of 100, citing his ability to listen and be supportive to his team as driving factors. One employee said the executive team, “are doers, they don’t just delegate but jump in and take on tasks themselves when it’s needed.” 

Satya Nadella, Microsoft CEO
Microsoft (MSFT) CEO Nadella scored an 82 out of 100, citing his ability to drive culture changes at the company in a “very impressive way” and moving from a “know it all” mentality to “learn it all.”

The short version of what we can learn from these CEOs who were ranked high by their employees?

Care for employees is as important as revenue generation
Down-to-earth, “doer” type person
Biased toward action, even for themselves
Openness with everyone, soliciting information from others
Listening to others as a driving factor
Learning culture, with a “know it all” culture not tolerated

Best and worst CEOs of 2017, by Jade Scipioni.  Published December 29, 2017 Career FOXBusiness.

Larry Sharp, Director of Training, IBEC Ventures

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Is your Kingdom business one of the “Best Places to Work”?

Saturday, February 03, 2018

“If you are not investing in your employees, there’s really not much more to invest in. People are first and foremost at PSE,” says Kimberly Harris, CEO of Puget Sound Energy

I am always curious when the latest study comes out on “Best Places to Work”. Seattle Magazine1 came out with its latest study in January 2018.  These Seattle-area companies range in size from fifty to thousands and have a wide range of business models.  I was intrigued as I read some of the factors making them one of the local “best places to work”.

Accolade:  Said one employee review: “The best organization I ever worked at.  Management instills an empowerment environment.”

Housing Hope:  This nonprofit spent three years transforming the culture of the organization for its employees into one of two-way communication, hope (by encouraging employees to imagine what might be), and affirmation (showing appreciation for what is and challenging employees to bring forward best practices.  “We wanted to create a place where everyone could flourish, both in their lives and at work – and where employees knew we cared about them as people” says Todd Fast, Director of Administration and HR.

MOD Pizza:  The founders created a business that has a positive impact in the lives of their employees and their communities.  They believe that if they take care of their employees, those employees will take care of the customers, and the business will take care of itself.”

Overlake Medical Center: “Our employees are our greatest asset,” says J. Michael Marsh, CEO.  Interesting side note.  I had three operations in this hospital in 1969 after a construction accident while in college and six days before our marriage (but that’s another story).

Puget Sound Energy: “If you’re not investing in your employees, there’s really not much more to invest in.  People are first and foremost at PSE,” says Kimberly Harris, CEO.

WE Communications:  Miesha Swensen, senior account executive says, “Our opinions matter; we are encouraged to talk about what’s working and what’s not.  We are encouraged to take time off and recharge.  The people here are inspiring; I feed off their energy and knowledge…”

Sweeney Conrad:  The locally owned accounting firm gets high marks for treating employees like family and encouraging them to maintain a healthy balance between career and personal goals, “Leadership genuinely supports and values you as an individual,” says Michelle Peters.

Zillow Group:  Zillow takes care of its employees and they, in turn, are fanatically loyal…96% say they are proud to work at the company.

While some of these companies have thousands of employees, two of them are in the 50-60 range.  Many of the perks are things that even small companies can do, like: provisions of healthy snacks to give energy during the day, a $300 wellness certificate to pursue health activity times during the work day, incentives to work at an overseas office, encouraging gifted artistic people to improve the work environment, an on-site coffee cart during the busy season with free espresso drinks, provision of flexible work hours and days to work at home, and employee get-togethers for fun.

Kingdom companies should start off by being committed to being a “best place to work.”  Such a result takes commitment, intentionality and hard work.  But remember, the employees are the greatest asset, wherever and whatever the business may be.

They believe that if they take care of their employees, those employees will take care of the customers, and the business will take care of itself.” MOD Pizza

1   Mickool, Sheila, “Best Places to Work:  The Working Life.”  Seattle.  January 2018.

Larry Sharp, Director of Training, IBEC Ventures

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IBEC Ventures -- Consultants for BAM/Business as Mission